While I don’t have actual proof, it seems that market researchers have spent more time understanding Millennials – in particular their dining and drinking habits – than any other generation in the past few years. The latest fruit of their labor is an interesting dining model backed by fast food chains and beverage alcohol brands: Fast Casual restaurants (think Chipotle and Fatburger) serving booze. If research is right, a Crunch Wrap Supreme with a Margarita on the side or a Venti glass of wine could be what it takes to get more Millennials in the door. Representing 25 percent of the U.S. population, Millennials mean big business.

Big Players

The concept isn’t new, but it’s catching on like wildfire right now. Taco Bell just joined the club with its first “Taco Bell Cantina,” serving booze next to tacos in Chicago. Diners can expect a slightly nicer brick-and-mortar location with shareable appetizers, wine, beer and frozen cocktails. A place you’d actually want to eat in – which is the whole point – instead of opting for the drive-through. “Alcohol is a way fast casual restaurants can say ‘we are a dinner destination,’” said Elizabeth Friend, senior research analyst for Euromonitor. Frozen drinks at Cantina include “Mountain Dew Baja Blast,” “Cantina Punch” and “Cantina Margarita” freezes, all of which can be served with the customer’s choice of rum, vodka or tequila mixed in.

 Shake Shack, a burger joint in New York, was an early adopter of the Fast Casual wining and dining idea, and now has its own line of wine and beers called “ShackMeister” (ShackMeister Ale is made  by Brooklyn Brewery to keep it local). And that’s just the spark that ignited the fire: Starbucks started serving wine and craft beer earlier this year as part of its “Starbucks Evenings” program, and Target has plans to test a wine bar concept in the Windy City before the end of the year.

Shared Challenges

By joining forces, quick service food chains and booze brands are addressing three dining and drinking habits of Millennials that affect both industries (for a deep dive into Millennials’ dining habits, check out this infographic from Restaurant Marketing Labs):

1. Customization: 30 percent of Millennials say that the ability to customize is important to them when considering where to eat and what to buy.  They crave unique experiences and variety.

  • Key Takeaway for Booze: Create a seasonal brew or cocktail that’s only available for a limited time. For your menu staples, offer cocktails that work with more than one type of spirit and let customers choose if they want to add vodka, gin or tequila. Wine brands should consider themed wine flights to pair with signature menu items.

2. Connections: Millennials crave different types of connections on- and offline. New Fast Casual restaurants are creating bigger communal seating areas and shareable appetizers. This demographic also favors companies that source their ingredients locally or that engage with communities by giving back.

  • Key Takeaway for Booze: Find a local hook or create something shareable. If you’re a winery or craft brewery from the area, you’ve hit the jackpot. The Bacardis and Diageos of this world can still score high by developing a drink that can be served in pitchers or a punch bowl.

MillennialGraphicForBoozeBin1

3. Value, but not At All Cost: There’s a big difference between what Millennials say and what they do. For example: Millennials go to McDonald’s the most, but it’s the restaurant they are least likely to endorse. Taco Bell comes in as the third most visited restaurant, but is in the bottom four of 35 brands Millennials would recommend to a friend. On the opposite end of the spectrum, Fast Casual brands rank high in visits and endorsements. A possible reason: this category is winning because consumers like to feel they’re getting great-tasting food for a good price in a nice atmosphere.

  • Key Takeaway for Booze: Provide a stellar experience by training restaurant staff, even if you fall in the “value” category. That’s especially important for wine: “If you don’t know how to sell wine, it can make you look bad to customers. (…) Wine needs to be at the right temperature, and you can’t leave a bottle sitting around for weeks,” said restaurant consultant Aaron Allen in an interview.

graph for booze bin

One (Super)Size Doesn’t Fit All

Hopping on the Fast Casual bandwagon is not the right move for every beverage alcohol brand. In my opinion, “craft everything” is the winner, followed by big value and volume brands that Millennials don’t flock to naturally. Take Taco Bell, for example: Captain Morgan rum, Don Julio tequila and Ketel One vodka are partners of the “Cantina” concept. It’s a great opportunity for these bigger brands to interact with Millennials who usually prefer the underdogs (as in small producers) of the alcohol business.

What it really comes down to is how well brands engage with consumers outside of the Fast Casual dining experience. A Mountain Dew Baja Blast with Captain Morgan sounds great for my first visit to Taco Bell Cantina, but what comes next? It will be interesting to monitor booze brands’ engagement strategies with Fast Casual diners in the coming months.